The preferred buyer for troubled steelmaker British Steel has sparked fears of hundreds of job losses with plans to boost productivity.
Oyak, the Turkish Armed Forces pension fund which is at the front of the line to buy British Steel, is attempting to boost output at the firm’s main plant in Scunthorpe to around 3mln tonnes per year while also modernising production to lift this to a longer-term goal of 3.2mln tonnes.
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By contrast, last year the plant produced 2.8mln tonnes of steel.
In an interview with the Financial Times on Monday, Toker Ozcan, head of Oyak’s mining metallurgy group, said the fund was also in talks with the UK government for a “financial contribution” to help British Steel plants run on hydrogen as part of a “green” steelmaking strategy.
Oyak itself is no stranger to the sector, as it also owns around 49% of Erdemir, Turkey’s largest steel producer.
Ozcan refused to comment on the possibility of job cuts, saying he was “not interested on headcount but on productivity”, however, the FT said two people with knowledge of the takeover talks said the plans could result in several hundred redundancies among British Steel’s more than 4,000 employees.
In a statement last Friday, Roy Rickhuss, general secretary of the steelworker’s union Community, said they would be scrutinising the rescue deal and would seek assurances that Oyak had a “long-term strategy to invest in the assets and develop the business going forward”.
The future of the steelmaker was thrown into doubt in May after the collapse of rescue talks between the British government and its former owner Greybull Capital placed it into insolvency.